Lesson 03 · 13 min read
Sourcing and Screening Deals
Find deals that fit the buy box and screen them fast with NNN and industrial checklists so you only underwrite what deserves it.
Most buyer rep time is lost on deals that never had a chance. Underwrite every listing and you burn days on buildings a five-minute look would have failed. Skip the screen and you send the client a stream of maybes.
This lesson is the funnel: find deals that fit the buy box from Lesson 2, screen them in minutes, and underwrite only the survivors.
Screening is a fast pass, park or pursue call before real underwriting. An offering memorandum (OM) is the seller's marketing package. Stated NOI is the seller's net operating income (NOI); buyer NOI is your normalized version. A cap rate is NOI divided by price. A rent roll lists every tenant, rent and lease date; the T-12 is the trailing twelve months of income and expenses. A NNN lease makes the tenant pay taxes, insurance and maintenance. Rollover is when leases expire and the space must be re-let.
This builds on Lesson 2, Buyer Discovery and the Buy Box, and feeds Lesson 4, Underwriting for the Buyer. Related: Course 09 and Course 13 Lesson 6.
Where deals come from
No channel finds everything. Run two or three in parallel and log each deal's source.
| Channel | Pros | Cons |
|---|---|---|
| LoopNet | Broad on-market coverage, saved searches | Everyone sees it; stale listings |
| Crexi | Alerts and saved searches | Same crowd as LoopNet |
| CoStar | Comps plus tenant and lease data, if your firm subscribes | Access depends on the firm; verify every figure |
| MLS, where commercial is carried | Structured data for small commercial and land | Thin coverage; fields vary |
| Broker network and listing agents | Early looks, pocket listings, best terms | Takes months to earn |
| Direct owner outreach | Off-market, no competing bidders at first | Low hit rate; compliance rules; no listing split |
| Site marketplace, listings and map search | Central Florida private and MLS-fed product in one place | Limited inventory |
| 1031 pages: properties, NNN, warehouse | Starting points for exchange clients | Marketing pages, not the full market |
A 1031 exchange lets an investor defer tax by buying replacement real estate on a strict clock, so those buyers need deals fast. See Course 09 on LoopNet, Crexi and public platforms and direct-to-owner outreach.
Working with listing agents
The listing agent controls the OM, financials and offer process.
A listing agent needs five things from you: the buyer entity name and signer, proof of funds or a lender letter for the price band, a signed confidentiality agreement (CA), a three-line buy box summary, and fast, clear answers. The CA is usually the listing side's form; have the client's attorney review it, and never sign for the client. Ask for the OM, rent roll, T-12, lease summaries, offer process and deadline, and what the seller cares about besides price. Never ask for the seller's bottom line.
(a) Situation: You found a listing and need the package. "Hi [Name], I represent [Buyer Entity], a 1031 buyer looking at [asset type] in [county] from $[low] to $[high]. We like [address]. Attached are our signed CA and proof of funds. Please send the OM, rent roll, T-12 and lease summaries, and the offer deadline and process. I represent the buyer under a written agreement. Thank you, [Your name], MaxLife Commercial, a division of MaxLife Realty LLC | [phone] | [email]"
Per Course 09 on building broker relationships: return calls the same day, pass with a reason, never shop a broker's package.
The five-minute screen
Before opening a spreadsheet, answer six questions from the listing and public records.
| Check | Question |
|---|---|
| Price | Inside the buy box range, and sane per SF? |
| Cap rate on stated NOI | Then knock it down: what is it on your NOI? (cap rate calculator) |
| Size | Right building or lot size? |
| Location | County, corridor, flood, access? |
| Tenant or lease | Credit, term left, rollover? (credit ratings page) |
| Asset condition | Roof age, deferred items, functional fit? |
Then decide and write a one-sentence reason.
| Result | Meaning | Your action |
|---|---|---|
| Pass | Fails a hard buy box rule or hits a kill flag | Tell the broker; log a reason code |
| Park | Fits, but price or one fact must change | Set a re-screen date and the price that works |
| Pursue | Fits on all six | Request the full package; start Lesson 4 |
Stated numbers are marketing. Test them with the NNN value estimator or industrial value estimator, then use the deal analyzer on a Pursue. The PDF analyzer can pull numbers from an OM, but it is triage, never underwriting.
The NNN screening checklist
Course 13 teaches tenant credit and the lease in depth; here you only need enough to pass, park or pursue.
| Check | Ask | Screen flag |
|---|---|---|
| Tenant credit and guaranty | Corporate, franchisee or personal guarantor? | Thin franchisee with a short guaranty |
| Remaining term | Years left; options? | Short term with no option history |
| Escalations | Fixed bumps? When? | Flat rent for the whole term |
| Lease type | Absolute NNN or NNN? | "NNN" where the landlord keeps roof and structure |
| Landlord duties | Roof, structure, parking; ages? | Old roof on a landlord obligation |
| Rent versus market | Reasonable for the location? | Rent far above market (dark-store risk) |
| Sales, if reported | Rent as a share of sales | Sales unreported or falling |
| Purchase option or ROFR | Any right that blocks a buyer? | ROFR held by the tenant |
| Location and traffic | Corner, access, visibility, drive-thru | Median blocks turns; weak access |
| Price versus comps | How does the cap compare? | Below floor with no growth to offset |
A guaranty is a promise by a parent or owner to pay if the tenant does not. Absolute NNN means the tenant also handles roof and structure; many "NNN" leases leave those with the landlord. A ROFR (right of first refusal) lets a party match your offer. A dark store is closed but may still owe rent. Verify the current credit rating at acquisition.
Compare caps only with dated sources; the evidence table in Lesson 2 shows how to label them. The Boulder Group Q2 2026 report on the site's NNN market report page gives national asking caps, such as 7.49% for dollar stores, not Central Florida closed comps. See also cap rate comps; treat any range as market practice that varies.
The industrial screening checklist
Industrial deals turn on the building and rollover. Small-bay flex is a multi-tenant building of small units, often with offices in front. Industrial outdoor storage (IOS) is a fenced yard for trucks, trailers and equipment. Course 17 covers small-bay flex and IOS.
| Check | Ask | Screen flag |
|---|---|---|
| Rent versus market | How far below or above market? | Above market with near-term rollover |
| Occupancy and rollover | Share of SF or rent rolling in 12 to 24 months? | Big share rolling with no renewals |
| Clear height | Measured to the lowest obstruction? | Under what the target tenant class needs |
| Docks and doors | Dock-high, grade-level, count vs SF? | Too few for the tenant pool |
| Power | Amps, voltage and phase, per bay? | Single-phase; see three-phase power |
| Truck court and yard | Can a 53-foot trailer turn? | Tight court in a truck-heavy submarket |
| Roof age | Age, type, leaks? | At or near end of life |
| Zoning and use | Use permitted or nonconforming? | Outdoor storage without approval |
| Flood | Which flood zone? | Special flood hazard area |
| Environmental history | Prior uses, tanks, drains, stains? | See environmental due diligence |
| Functional obsolescence | Who is the next tenant? | No clear answer |
| Price per SF versus comps | Basis versus recent sales? | High basis with no story |
Clear height is the distance from floor to the lowest overhead obstruction. A dock-high door meets a truck bed; a grade-level door lets a vehicle drive in. The truck court is the paved area where trucks maneuver. Clear height and truck court are hard to change; power and doors often can be added at a cost. Zoning differs by county and city, so confirm outdoor storage and truck use with the jurisdiction. For value checks see the industrial property pages and, once a building passes, the industrial deal analyzer. Retail, medical office and land get the same six checks; see freestanding NNN retail, medical office and land.
Kill criteria
Some flags end a deal early. Write them into the buy box so you can pass without a debate. See Course 08 on knowing when to walk and Course 10 on later diligence.
- Short term left with weak credit.
- Deferred capital beyond the client's budget.
- A zoning problem or nonconforming use.
- An environmental flag on a fuel, dry-clean or heavy-industrial site.
- Unrealistic NOI: one-time income, or no management fee or reserves.
- A seller who will not provide leases, financials or estoppels (tenant confirmations of lease facts).
- A flood zone with no insurance quote.
This is education, not legal, tax or lending advice. Route legal points to your broker of record and a Florida attorney, tax points to the client's CPA, and financing to the client's lender.
Presenting deals to the client
One page per deal, same layout each time.
| Field | Entry |
|---|---|
| Property, price, price per SF | Address, county, asset type, size |
| Stated NOI and cap; buyer NOI and cap | Seller's numbers, then your quick adjustments |
| Tenant, lease and physical facts | Term, bumps, credit or rollover; roof, clear height, power, flood |
| Screen results | Pass, park or pursue on each check, plus flags |
| Recommendation | One line and a price that works |
| Next step and date | Who does what by when |
For an exchange buyer, rank deals against the 45-day identification and 180-day closing clock, keep backups, use the 1031 timeline calculator, and refer tax questions to the client's qualified intermediary (QI) and CPA.
Track every deal in your CRM by stage: New (screen within one business day), Parked (re-screen date and target price), Pursue (request the package), Underwriting (Lesson 4 memo) or Passed (reason code, tell the broker). If half the passes share one reason, revisit the buy box.
Working the off-market
An unlisted owner has no listing split and no broker. You can approach them, but on a clear footing.
- Build the list from public records (Course 23 Lesson 3).
- Check for a listing. If the property is under a listing agreement, contact the listing broker, not the owner.
- Follow the contact rules in Course 23 Lesson 4 and Lesson 5, and confirm calling and texting rules with your broker.
- Say who you represent at the start, using the firm's licensed name in writing (Fla. Admin. Code R. 61J2-10.025).
(b) Situation: Owner outreach for a specific buyer. "Hi [Name], this is [Your name] with MaxLife Commercial, a division of MaxLife Realty LLC. I represent a qualified buyer who is looking for [asset type] in [county]. Your property at [address] fits. I do not know whether you would sell, and there is no pressure. If you would like to hear a price and terms, I can send a short written letter of intent (LOI). May I send it to [email]?"
Compensation needs care. With no listing split, your written buyer agreement must state the fee, because a buyer's broker has no lien on the owner's proceeds. Lesson 1 covers the fee terms, the notice you may give the closing agent, and Florida's transaction broker and dual agency rules. If your firm also holds the listing, stop and ask your broker of record.
Do state that you represent the buyer and suggest the owner consult their own attorney or broker. Do not pose as the principal, pressure the owner, invent a deadline, give legal or tax advice, reveal the client's walk-away, or keep calling after a no. An LOI is mostly non-binding, so protect both sides with a confidentiality term and a neutral deposit holder at a title company, and tell your client about any interest you or your firm has. Lesson 5 covers the offer.
A worked example (illustrative deals, invented numbers)
All numbers are illustrative, not market data or MaxLife results. The client is Harbor Line Holdings LLC, an invented 1031 buyer.
Buy box: $2,000,000 to $7,500,000 in Orange, Seminole, Osceola, Lake, Polk, Brevard and Volusia. NNN needs a buyer cap of at least 6.00%, 10 or more years left, and investment grade credit or a strong guaranty. Industrial needs a buyer cap of at least 6.25%, a roof under 15 years old, no flood zone, and no more than 25% of SF rolling in 12 months.
Deal 1: a Dollar General in Polk County, price $2,050,000, base rent $123,000, absolute NNN, 12 years left. Deal 2: a 24,000 SF small-bay flex building in Seminole County, price $3,600,000, rent $10.75 per SF NNN. Deal 3: a 60,000 SF multi-tenant industrial building in Osceola County, price $7,200,000, 40% of SF rolling in 12 months, roof 22 years old, partly in a flood zone, stated NOI including a $30,000 one-time termination fee.
Screen shortcuts, from commonly cited ranges that vary by lender and building: 5% vacancy on multi-tenant income, 4% management (1% owner administration on the single-tenant lease) and $0.20 per SF reserves on multi-tenant. Lesson 4 replaces these with insurance quotes and reassessed taxes, since the seller's tax bill can understate yours.
| Line | Deal 1 | Deal 2 | Deal 3 |
|---|---|---|---|
| Stated NOI | $123,000 | $24,000 x $10.75 = $258,000 | $540,000 |
| One-time income | $0 | $0 | -$30,000 |
| Vacancy at 5% | $0 | 5% x $258,000 = -$12,900 | 5% x $510,000 = -$25,500 |
| Management | 1% x $123,000 = -$1,230 | 4% x $258,000 = -$10,320 | 4% x $510,000 = -$20,400 |
| Reserves | $0 | $0.20 x 24,000 = -$4,800 | $0.20 x 60,000 = -$12,000 |
| Buyer NOI | $121,770 | $229,980 | $452,100 |
| Cap on stated NOI | $123,000 ÷ $2,050,000 = 6.00% | $258,000 ÷ $3,600,000 = 7.17% | $540,000 ÷ $7,200,000 = 7.50% |
| Cap on buyer NOI | $121,770 ÷ $2,050,000 = 5.94% | $229,980 ÷ $3,600,000 = 6.39% | $452,100 ÷ $7,200,000 = 6.28% |
| Buy box floor | 6.00% | 6.25% | 6.25% |
| Deal | Fit and flags | Result | Next action |
|---|---|---|---|
| 1. Dollar General NNN | Buyer cap 5.94% is under the 6.00% floor, and national dollar store asking caps were 7.49% in Q2 2026 (Boulder Group), so the price looks rich. Confirm rating and guarantor. | Park | Re-screen at $121,770 ÷ 0.06 = $2,029,500 or less, a cut of $20,500 (1.0%) |
| 2. Small-bay flex | Buyer cap 6.39% clears 6.25%. Price per SF is $3,600,000 ÷ 24,000 = $150. Verify roof, power per bay, zoning. | Pursue | Request T-12, leases, roof records; price at a 6.25% cap is $229,980 ÷ 0.0625 = $3,679,680 |
| 3. Multi-tenant industrial | Cap 6.28% barely clears the floor but fails three rules: 40% rollover, 22-year roof, flood zone. NOI has a one-time item. | Pass | Tell the broker why. An illustrative roof credit of $7.00 x 60,000 = $420,000 gives $6,780,000 and a 6.67% cap ($452,100 ÷ $6,780,000); rollover and flood still fail |
Key takeaways
- Run two or three sourcing channels and log each deal's source.
- Give listing agents proof of funds, a signed CA and a three-line buy box.
- Screen on six checks and end with pass, park or pursue plus a one-sentence reason.
- Use the NNN and industrial checklists to find flags, and treat kill criteria as pre-agreed buy box rules.
- Recompute NOI before trusting a cap rate, and code every pass.
- Off-market work needs a written buyer agreement stating the fee, and a clear statement of who you represent.
Next: Lesson 4 builds the buyer-side underwrite for the deals that pass the screen.